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Residential

As construction gets underway on mega-project, LES braces for change

With construction underway at the 1.9 million s/f Essex Crossing, tangible change is on the horizon for yet another area of Manhattan that was once viewed as a last resort by many.

“If you look at really just Houston and Delancey, Houston used to be the line that you wouldn’t cross, and then it was Delancey in terms of what you would call the hippest neighborhood,” said Peter Von Der Ahe, vice president investments at Marcus & Millichap.

“This is really a transformational development because it will have such a draw and it will improve the value of the assets down there.”

When Essex Crossing is completed, it will be comprised of nine buildings on six acres which had sat mostly vacant for over 40 years.

The final result will include a mix of commercial, community and residential spaces as well as The Joan H. and Preston Robert Tisch Center at Essex Crossing. This will be a 40,000 s/f medical facility which is part of the NYU’s Lagone Medical Center family.

“It really will ignite what will happen with the neighboring buildings,” Von Der Ahe continued. “You’ll have a critical mass of people, a critical mass of restaurants.”

The investment sales expert expects the area to continue to attract a wide array of New Yorkers, but in particular, millennials who are “in the phase of life before you’re actually buying.”
He pointed to the area’s access to both the known commercial draws of Manhattan and the “social fabric” of popular Brooklyn neighborhoods like Williamsburg.

Millennials who are often driven to live near both their work and their play will enjoy the access to major transportation lines and proximity to the Brooklyn Bridge.

“This signals a big wave of new apartments — both affordable and market rate — coming to the neighborhood,” David Amirian president of The Amirian Group said.

Amirian recently served on a panel which focused on the rapidly changing Lower East Side. “There hasn’t been a big multi-family project going on in the Lower East Side in a long time. This is the first of its kind.”

Amirian said that the boost in affordable housing, is “really necessary” for the area as it will “solidify the Lower East Side as the entryway, or the barrier where young professionals and college graduates are going to keep moving to.”

The decades-long project will likely have a profound impact on the area’s retail climate as well.
“The retail in that area is, I don’t want to say struggling, but it’s been chugging along,” Faith Hope Consolo, chairman of Douglas Elliman’s Retail Group, told Brokers Weekly.

The changing residential landscape, mixed with the other draws that are soon to appear in Manhattan’s southeastern corner, will likely generate more exposure for the area’s retailers.

“There’s no real stability. I think what this will do is not only stabilize the area, but really generate some good traffic.”

The target completion date for Essex Crossing is 2024. Essex Crossing is being developed by a partnership of Taconic Investment Partners and L+M Development Partners and BFC Partners.

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